January 29, 2014

There’s no estimate of what this would cost the government. When I tried to generate one, I quickly gave up, because I have no idea what it means to say that this will “affect” more than 2 million employees, or what those employees might be paid right now. Some back-of-the-envelope doodling suggests that it will probably cost the government a lot in actual dollars, but not that much per U.S. citizen. Which way we should look at it is left as an exercise for the reader.

As commentators have pointed out, this is the act of an administration that has given up on big moves. Though Obama will be promulgating this executive order in the context of a broader call for Congress to raise the minimum wage, he does not have the political muscle to force that through. Democrats can speak hopefully of a new populist moment centered on proposals such as a higher minimum wage, but this is the third or fourth time that the president has attempted to launch a new populist, progressive moment. So far, all of his policy rockets have fizzled out on the launchpad, and there’s little reason to think that this will finally light a fire under Congress. So he’s taking symbolic action within his legal power.

But this is not just about a split between Democrats and Republicans; it’s also about a growing split within the Democratic Party over what government jobs are for. Virtually everyone in the party used to support strong public-sector unions and jacking up public-sector wages. But as budgets have tightened, pensions have begun to crowd out other spending, and the public-sector unions became an increasing obstacle to reform, tension has mounted between providing more government services (or even the same level) and giving government workers generous pay packets, gold-plated retirement benefits and nearly ironclad protection from pink slips. . . .

At a time of great economic insecurity, it’s not great politics to make government workers the “haves” of the labor market: paid above-market wages and shielded from the chronic risk of job loss that most of the rest of America faces. Oh, sure, this is true for everyone — professionals often have to take a pay cut to work for the government. But to the average person sweating it out through rounds of layoffs at a job they don’t like very much, government workers seem to have it very good by comparison.

Does anyone think small towns and cities are going to pay snot nosed kids 10 bucks an hour to mow grass and run recreation programs? We'll end up hiring a few retired folks that might actually be worth 10 bucks an hour.

This executive order is more symbol than substance. It only covers new government contracts. In other words, if the contract is inked and expires in 2018, this will not affect things until the rebid of the contract.

It also only covers government *contractors* - not civil servants or military personnel. Depending upon how it is written, it may not affect subcontractors. If so, then a company with a contract to clean government buildings might be able to bid the job, win, and then farm out the actual work to a subcontractor that pays employees minimum wage.

It almost certainly will not affect the cost of labor for commercial products sold to the government, or for say, companies selling such goods to the government. I don't think this can bind, say Staples to pay all of its employees $10.10/hr for the privilege of allowing the Federal Government to buy paper from them.

And contractors fill a role equivalent to that of Soviet penal battalions in WWII: disposable workers, hired at need and discarded when inconvenient.

The cost of living in New York City is vastly different than that of Mississippi.The cost of living in San Francisco is vastly different from that of Nebraska.

Why have a national minimum wage? If New York City wants a relevant minimum wage, they should set one. But any national minimum wage will be useless in New York City, but a job loser in low-cost rural areas.

Never underestimate the idiocy of bureaucratic over-reach from Washington D.C.

Howdy DLM77I agree there's no Constitutional basis for a federal minimum wage law; it's been dragged in under Commerce, along with a lot of other stuff that should lie with "...the states, or the people."States would have more authority to set minimum wage laws than the feds do, but it would still be a bad idea for them to set minimum wage laws. They don't reduce poverty, they just raise the baseline of poverty.

Does anyone think small towns and cities are going to pay snot nosed kids 10 bucks an hour to mow grass and run recreation programs? We'll end up hiring a few retired folks that might actually be worth 10 bucks an hour.

This executive order is more symbol than substance. It only covers new government contracts. In other words, if the contract is inked and expires in 2018, this will not affect things until the rebid of the contract.

It also only covers government *contractors* - not civil servants or military personnel. Depending upon how it is written, it may not affect subcontractors. If so, then a company with a contract to clean government buildings might be able to bid the job, win, and then farm out the actual work to a subcontractor that pays employees minimum wage.

It almost certainly will not affect the cost of labor for commercial products sold to the government, or for say, companies selling such goods to the government. I don't think this can bind, say Staples to pay all of its employees $10.10/hr for the privilege of allowing the Federal Government to buy paper from them.

And contractors fill a role equivalent to that of Soviet penal battalions in WWII: disposable workers, hired at need and discarded when inconvenient.

"it will probably cost the government a lot in actual dollars, but not that much per U.S. citizen"

Sigh. Pretty much everything the government spends money on is a lot, but not much per citizen. The thing is that when you start with the "...not much per citizen" line you wind up spending a lot per citizen. McArdle is smarter than this. Either she's become incredibly naive or she believes the rest of us are.

The headlines should be how many people are going to need to be let go given a fixed budget. Maybe even make it a class warfare discussion by observing that letting go one high-priced manager (perhaps giving his or her job to one of those being paid below minimum wage, given the Left's beliefs) they will be able to meet the pay (and health care) requirements for 4 "underpaid" employees (rather than just 1 for 1, i.e. letting go one low-paid worker to be able to improve the lot of another low-paid worker per Mr. O's requirement..).

Shades of Mr. Clinton and the cost of pizza. We need a constitutional requirement of running a successful business in the Fortune 5000 for a decade to qualify to run for any office with an executive role in the Federal government (or perhaps a state governor with a record of budget surpluses). Ditto any head of a Federal department.

IIRC (no, I wasn't a personal witness), prior to WW-1, the share of GDP represented by the Federal Gov't was about 5%.Strictly on a monetary basis, not counting the costs of regulation, to return to that level would only allow the gov't to spend only one of the eight Dollars it currently spends.With a commensurate reduction in regulations, Entrepreneurial Freedom and Individual Liberty could be restored to the American Republic.

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